public funds
(about $900,000), and all public offices, and as rapidly as possible
put this government in operation.

The machinery of the Spanish Government was thoroughly disorganized
when we entered Manila. The Courts of Justice, except the inferior
criminal courts, had not been in session since early in May; the
officials had been cut off from communication with the other islands
and with Spain for over three months; there had been no customs to
collect, and, owing to the entire suspension of business, but little
internal revenue; a forced loan of $2,000,000 for military purpose
had been extracted from the Spanish-Philippine Bank, and yet the
troops were several months in arrears of pay; all government offices
outside the walled city had been moved to temporary quarters within
the walls and their records had been lost or thrown into confusion;
the officials seeing the inevitable end in sight, were intent only
on planning for their return to Spain.

This disorganization was completed when the American Military officers
took charge of the Government, and every Spanish official, without
exception, refused absolutely to continue in service. They were
immediately dismissed and dispersed.

The situation thus created is without precedent in American
history. When Scott captured the City of Mexico it was acknowledged
on both sides that his occupation was only to be temporary, and there
were no insurgents to deal with. When the Americans entered California
they found only a scanty population, who were soon outnumbered by
the American immigrants. But in the Philippine Islands there is
a population of more than 7,000,000, governed by an alien race,
whose representatives present in the Islands, including military
and naval forces, clergy and civil employes do not exceed 30,000 in
number. Against this Government an insurrection is in progress, which
claims to have been successful in provinces containing a population of
about 2,000,000. The city and province of Manila, with a population
of 400,000 more, have been captured and occupied by a foreign army,
but whether its occupation is to be temporary or permanent has not
yet been decided.

Finally, the Government officials of all classes refuse to perform
their functions; the desire of most of them is to escape to Spain. It
was stipulated in the capitulation that they should have the right to
do so at their own expense, and numbers of them, as well as friars,
have already take